Is the cost of living crisis in the West indicative of something serious?

 

                                          Photo by Pixabay: https://www.pexels.com/photo/grey-metal-case-of-hundred-dollar-bills-164652/

The Western nations with their high standards of living have been both a cause of envy and a beacon of hope for people living in the countries of the third world. The incredible material progress achieved by leading Western nations like the United States, United Kingdom, Germany, France and even Australia, (which is not in the Western hemisphere, but is very much a Western nation) exhibited a template of what an ideal life could be. Well-fed and well-educated people living in fabulous houses, earning extremely well and living life to the fullest in every sense of the word. From driving expensive cars to holidaying at exotic locations, everything pointed to a very happy existence indeed. Add to that the fact these countries were by and large safe, followed a rules-based order and provided top-rate healthcare added to the allure of living there.

Things seem to have changed dramatically in the last few years, especially since the start of the Covid-19 pandemic. One began to hear of job layoffs, businesses going under and a rising cost of living crisis that threatened to forever change the paradigm of the "beautiful Western" lifestyle. From education becoming unaffordable with the accompanying student debt crisis and the inability of young people to buy homes and the rising food and energy crisis, the much-vaunted Western way of life seems to have become very shaky indeed. So what is going on? Is the cost of living crisis in the West indicative of something really serious?

Everybody is impacted

 

The fact of the matter is that the food and energy price rise has impacted everybody-rich and poor nations alike. In fact, tens of millions of people around the world run the risk of relapsing into poverty because of that.  The supply chain disruption caused by the pandemic has been further compounded by the war in Ukraine leading to intense inflationary pressures in nations across the world. The impact of this has been devastating in much of the underdeveloped world with people across Central Asia, Sub-Saharan Africa and South Asia (with the exception of India)suffering from immense economic deprivation. Very uncharacteristically many people in the developed nation (a quarter of the people by some estimates) are experiencing economic distress. Shockingly many people in the UK, a major G7 nation can’t afford food on a daily basis. With food and energy bills eating into most of their earnings, a large number of people are in real dire straits.

End of Four Centuries of Western Economic Dominance in Sight?

 

The West's economic dominance which started with the rise of European colonialism and reached its zenith under the United States in the present times. This led to unprecedented global growth, especially after the Second World War, raising the standards of living of not just their Western allies, but many other parts of the world. This unprecedented and unparalleled economic growth definitely seems to be now decelerating, if not stalling altogether. The steady decline in the living standards of the American middle class and that of other leading nations of the Western world has led these countries to gradually withdraw from an openly global trade regime to watch out for their individual national interest above everything else.

The economic rise of China and its striving to dislodge the United States from its preeminent position in global affairs has led to a realignment of geo-political strategies with the US according more importance to its Indo-Pacific allies like India and Japan than to its traditional ones in Europe (though the war in Ukraine has temporarily enhanced focus in that theatre.) China on its part is facing its own economic demons with a rapidly declining economy matched by its falling population and the rise in the mean age of its population.

The world is in a state of economic flux, with no clear sign of what the new economic order will look like in an era of the disintegration of a familiar way of doing things and the need to pivot to a green and environmentally friendly way of growing the world economy against the backdrop of a climate catastrophe. The cost of living crisis in the West or elsewhere may or may not be a foretaste of things to come, but there certainly is not a lot of clarity about what lies ahead.